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Thursday, August 28, 2008      Asia Investor /

The 2008 Beijing Olympics was a business bust

As the last strains of the kind of spectacular only authoritarian governments can throw filled architecturally “challenging” new structures, the Chinese are toting up the costs of an effort to prove to the world they have arrived. But whatever the bill for the government — it may have come close to $50 billion — the cash registers didn’t ring for the Chinese business community.

The flood of foreign visitors never arrived: Beijing had not many more than the 420,000 visitors it got last year, according to trade associations. A clampdown on visas for young foreigners — part of the intensive and extensive security arrangements — gave China Air, the national carrier about 20 percent less traffic this July than last year. Domestic visitors, too, decided it was better to stay at home and watch the Games on TV rather than risk possible terrorist episodes, the crowding and high costs of the Beijing Olympics boom.

Wang Zhenghui, director of China's Hotel Association in Beijing, told the Los Angeles Times that occupancy during the Olympics was only 50 to 60 percent, a long way from the overflow that had been expected. Of the 20,000 apartments listed with Olympics officials for short term lease, only 8,000 were rented.

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Given the lack of transparency and the accounting creativity of the Chinese government, the cost to the economy of the industrial and traffic cutbacks in an attempt to stem pollution during the Games will probably never be known. The Beijing authorities had not only temporarily closed down many karaoke rooms and sleazy entertainment facilities deemed capable of corrupting the athletes and their friends, but industrial plants were also sequestered. The alternate-day, even-odd controls on traffic not only penalized Beijing’s wealthier commuters, but made for additional costs for food and other necessity deliveries.

Many if not most Beijing residents would welcome back a return to “normal” conditions in the megapolis.

"Otherwise it would be too inconvenient for people . . . and will largely decrease the efficiency of the city," said Hu Xingdou, an economics professor at the Beijing Institute of Technology. "Actually, nowadays, many ordinary people sincerely hope that the Games could finish sooner."

Given the Chinese penchant for enormous state pageantry — an inheritance that preceded even the Communist state theater Beijing copied from the Soviets and the Nazis — the elaborate and pace-setting major construction for the Games will probably be put to use in future state functions. That’s a net gain over many other former “Olympic cities” — Athens, for example — where the facilities have become white elephants and contributed to near bankruptcy for their sponsors.

But none of this economic and business history seems to have dimmed the enthusiasm as Beijing faded and the British picked up the Olympic torch for the 2012 London Games.

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